A

SUMMER TRAINING PROJECT REPORT

ON

“A STUDY ON IMPACT OF GOODS AND SERVICES TAX {GST} ON REAL ESTATE

SECTOR.”

Submitted in partial fulfillment for the award of

MASTER OF BUSINESS ADMINISTRATION

Submitted To: Submitted By:

Mrs. Punjika Rathi Priyanka

MBA -3rd semester

ROLL No.: 1714370028

Department of MBA
I.M.S ENGINEERING COLLEGE, GHAZIABAD
Affiliated to APJ Abdul Kalam technical university, Lucknow
Session-2017-2019
i
 CERTIFICATION OF APPROVAL

IMS Engineering College, Ghaziabad – Delhi NCR

A NAAC ACCREDITED INSTITUTION

(Approved by AICTE & Affiliated to Dr. A.P.J Abdul Kalam Technical

University, Lucknow)

This is to certify that Ms. /Mr. PRIYANKA Roll No. 1714370028 is a bonafide student of MBA
3rd semester during session 2018-19. The summer training project report entitled “A STUDY
ON IMPACT OF GOODS AND SERVICES TAX {GST} ON REAL ESTATE SECTOR”
has been prepared by him/her in partial fulfillment for the award of degree of Master of Business
Administration of Dr. A.P.J. Abdul Kalam Technical University, Lucknow (formerly UPTU
Lucknow).

Mrs. Punjika Rathi Dr. Monica Verma

(Faculty In charge) Head-MBA

ii
 DECLARATION FORM

I hereby declare that the Summer Internship Project Work entitled, STUDY ON IMPACT OF
GOODS AND SERVICES TAX (GST) ON REAL ESTATE SECTOR submitted by me,
PRIYANKA, Roll No.. 1714370028, for the partial fulfillment of the master of business
administration (M.B.A) to IMS Engineering College, Ghaziabad is my own original work and
has not been submitted to A.K.T.U. University for the fulfillment of the requirement for any
course of study. I also declare that no chapter of this manuscript in whole or in part is lifted and
incorporated in this report from any earlier / other work done by me or others.

Priyanka

Roll No -1714370028

iii
 ACKNOWLEDGEMENT

I would like to express my deepest appreciation to all those who provided me the possibility to
complete this project report. A special gratitude I give to Mrs. Punjika Rathi whose
contribution in stimulating suggestions and encouragement helped me to coordinate my project
especially in completing this report.

I am very thankful for her invaluable guidance, support, and affable & friendly nature. She
guided me at each and every stage of project.

I am equally indebted to my dear Parents; Good friends who always inspired and motivated me
to do something better throughout this project.

At last I would like to thanks to every person to whom I have visited for giving their support and
valuable information, which helps me in completing my project work.

Priyanka

Roll No. - 1714370028

iv
 TABLE OF CONTENTS

S. No. PARTICULARS Page No.

1. CHAPTER-1

INTRODUCTION 1-41

2. CHAPTER-2

COMPANY PROFILE 42-79

3. CHAPTER-3

LITERATURE RIVIEW 80-81

4. CHAPTER-4

RESEARCH METHODOLOGY 82-84

5. CHAPTER-5

DATA ANALYSIS AND DATA INTERPRETATION 85-91

6. CHAPTER-6

FINDINGS 92-93

CONCLUSION 94

SUGGESTIONS & RECOMMENDATIONS 95

LIMITATION OF THE STUDY 96

7. CHAPTER-7

BIBLIOGRAPHY 97-98

8. CHAPTER-8

ANNEXURE 99-101
 CHAPTER-1

INTRODUCTION

1
GOODS AND SERVICES TAX

2
CONCEPT OF GOODS AND SERVICES TAX

Meaning of GST

Clause 366(12A) of the Constitution Bill defines GST as “goods and services tax” means any tax

on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for

human consumption. Further the clause 366(26A) of the Bill defines “Services” means anything

3
other than Goods. Thus it can be said that GST is a comprehensive tax levy on manufacture, sale

and consumption of goods and services at a national level. The proposed tax will be levied on all

transactions involving supply of goods and services, except those which are kept out of its

purview.

HISTORY OF G.S.T.

Atal Bihari Vajpayee, the 10th Prime Minister of India, was the first to recommend the idea of

adopting GST during his time in office, in the year 2000. An Empowered Committee was formed

by the state finance ministers at the time, and their aim was to formulate a structure for GST as

they already had experience in creating State VAT. The Centre as well as the State had

representatives who were urged to examine several different aspects of the proposal so as to

come up with reports on the taxation of services, taxation of inter-state supplies, thresholds, and

exemptions. The Finance Minister of West Bengal at the time, Asim Dasgupta, headed the

committee and chaired it till 2011.

The advisory to the Finance Ministry between 2002 and 2004, Vijay Kelkar, led a task force and

sent a report to the Ministry in 2004, highlighting the issues with the then tax structure, adding

that these issues could be mitigated by adopting GST.

During his third term as the Finance Minister of India, P. Chidambaram said in 2005 that the

government’s medium-to-long term objective was to introduce a uniform taxation structure

across India and cover the entire production-distribution chain. As a result, a discussion

4
regarding the same took place in the Budget Session in FY 2005-06, and 1 April, 2010, was set

as the date on which GST would be implemented in India.

The advisor to Chidambaram, Parthasarathy Shome, said that preparations by the state to make

reforms may take time, but the deadline to implement the regime was retained at 1 April, 2010,

in the Union Budget 2007-08. Chidambaram confirmed that significant progress was being made

by the states to prepare for the implementation of GST in the Union Budget 2008-09, and the

deadline remained intact.

In 2009, following the appointment of Pranab Mukherjee as the new Finance Minister of India,

an announcement was made regarding the basic framework of GST, and there was still no

change in the deadline. In late 2009, the Empowered Committee, led by Asim Dasgupta,

presented the First Discussion Paper (FDP), explaining in detail the proposed GST reform. The

foundation for GST, however, was laid by the Mission-Mode Project introduced by the

government. The budgetary outlay of the project was Rs.1,133 crore, and it led to the

computerization of commercial taxes in the various states of India. Following this move, GST

implementation was delayed by a year.

The 115th Amendment to the Constitution saw the Government, headed by Congress, put forth

the bill for the implementation of GST. The bill drew protests from the opposition party and was

then sent for detailed scrutiny to a standing committee. The bill was discussed by the committee

in June 2012, and concerns were raised by the opposition party over clause 279B as it provided

extra powers to the Centre. As a result, Finance Ministers of various states along with the

Finance Minister of India held meetings before setting a deadline to resolve the issues by 31

December, 2012.

5
During the Budget Session in 2013, the Finance Minister made an announcement that states will

receive Rs.9,000 as compensation from the government, appealing to state finance ministers to

cooperate with the government so that an indirect tax regime could be implemented. In the same

year, the standing committee that was created to examine the bill, submitted its report to the

parliament, and the regulation was approved by the panel with a few amendments.

Arun Jaitley, the new Finance Minister of India, revealed in his budget speech in February 2015

that GST would be implemented by 1 April, 2016. However, due to disagreements between

states and parties in addition to legal issues, the implementation of the regime was delayed by

over a year, and on 1 July, 2017, the four GST-related bills, viz. Central GST Bill, Union

Territory GST Bill, Integrated GST Bill, and GST (Compensation to States) Bill became Acts.

The GST council, over time, finalized GST rules and rates, and the Government announced that

GST will come into effect on 1 July, 2017.

APPLICABILITY & MECHANISM OF G.S.T.

How is G.S.T. applied?

GST is a consumption based tax/levy. It is based on the “Destination principle.” GST is applied

on goods and services at the place where final/actual consumption happens.

GST is collected on value-added goods and services at each stage of sale or purchase in the

supply chain. GST paid on the procurement of goods and services can be set off against that

payable on the supply of goods or services. The manufacturer or wholesaler or retailer will pay

the applicable GST rate but will claim back through tax credit mechanism. But being the last

6
person in the supply chain, the end consumer has to bear this tax and so, in many respects, GST

is like a last-point retail tax. GST is going to be collected at point of Sale.

The GST is an indirect tax which means that the tax is passed on till the last stage wherein it is

the customer of the goods and services who bears the tax. This is the case even today for all

indirect taxes but the difference under the GST is that with streamlining of the multiple taxes the

final cost to the customer will come out to be lower on the elimination of double charging in the

system.

7
Let us understand the above supply chain of GST with an example:

8
G.S.T. MODEL

G.S.T.

Central GST State GST Integrated GST

Levied by the Levied by the Levied by the

Centre: State: Centre & State:

This is applicable on This is applicable on This is applicable on

supplies within the supplies within the interstate and import

state. state. transactions.

Tax

Tax collected will be Tax collected will be collected is shared

shared to Centre shared to State between Centre and

State

9
How is GST Levied?

GST will be levied on the place of consumption of Goods and

services. It can be levied on:

Intra-state supply and consumption of goods & services

Inter-state movement of goods

Import of Goods & Services

10
EXAMPLE:
BASIC CONCEPT OF GST:
Importer to wholesaler

GOLD 100000 100000

SALESTAX (14%) 14000 -

DUITY (12.5% ) 12500 -

EXCISEDUTY (1%) 1000 -

CGST (18%) - 18000

GRANDTOTAL 127500 118000

Wholesaler to retailers
PRICE 127500 118000

ADD MARGIN (10%) 12750 11800

OTHER CHARGES (Rent, transport) 15000 15000

SUB TOTAL 155250 144800

SALES TAX 21735 -

SGST (18%) - 26064

TOTAL PRICE 176985 170864

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Commodities not subsumed in GST:

Alcohol for human consumption

Petrol Products – Crude, Petrol, High Speed Diesel, Natural

Taxes not subsumed in GST:

Custom duty, stamp duty, vehicle tax, excise on liquor, Tax on Sale
and Consumption of Electricity, road tax, entry taxes and toll,
entertainment tax.

How to differentiate SGST and IGST:

12
SGST and IGST are part of GST, Goods and Service Tax. SGST expands as State Goods

and Service Tax and IGST is the short form of Integrated Goods and Service Tax.

Different indirect taxes like State Sales Tax, VAT, Luxury Tax, Entertainment tax (unless it is

levied by the local bodies), Taxes on lottery, betting and gambling, Entry tax not in lieu of

Octroi, State Cesses and Surcharges in so far as they relate to supply of goods and services etc.

are subsumed with SGST. Under IGST, the taxes for movement of goods and services from one

state to another is collected. The tax revenue collected under SGST is meant for State

Government whereas the tax revenue of IGST is shared between State government and Central

government as per the rate fixed by the authorities.

Difference between IGST&CGST:

CGST and IGST are part of GST, Goods and Service Tax. CGST expands as Central Goods and

Service Tax and IGST is the short form of Integrated Goods and Service Tax. Different indirect

taxes of Central Excise Duty, Central Sales Tax CST, Service Tax, Additional excise duties,

excise duty levied under the medical and toiletries preparation Act, CVD (Additional Customs

duty – Countervailing Duty), SAD (Special Additional Duty of customs) surcharges and cesses

13
are merged with CGST. Under IGST, the taxes for movement of goods and services from one

state to another are collected.

Major share of tax revenue under CGST is meant for central government where as IGST tax

revenue is shared between State government andCentral government as per the rate fixed by the

authorities.

How to differentiate SGST and CGST?

CGST & SGST are part of GST, Goods and Service Tax.CGST expands as Central Goods and

Service Tax and SGST is the short form of State Goods and Service Tax. Different indirect taxes

of Central Excise Duty, Central Sales Tax CST, Service Tax, Additional excise duties, excise

duty levied under the medical and toiletries preparation Act, CVD(Additional Customs duty –

Countervailing Duty), SAD (Special Additional Duty of customs) surcharges and cesses are

merged with CGST. Under SGST, the taxes like State Sales Tax, VAT, Luxury Tax,

Entertainment tax(unless it is levied by the local bodies), Taxes on lottery, betting and gambling,

Entry tax not in lieu of Octroi, State Cesses and Surcharges in sofar as they relate to supply of

14
goods and services etc. are subsumed. The major share of tax revenue under CGST is meant for

central government where as SGST tax revenue is for state government.

GST Rates in India:

Exempted categories – 0

Commonly used Goods and Services – 5%

Standard Goods and Services fall under 1st slab – 12%

Standard Goods and Services fall under 2nd Slab – 18%

Special category of Goods and Services including luxury - 28%

GST Council:

It is set up by president under article 279-A. It is chaired by union finance minister.

It will constitute union minister of state in charge of revenue and minister in charge of

finance or taxation or of any other field nominated by state governments. The 2/3rd

representatives in council are from states and 1/3rd from union.

It will make recommendations on:

a. Taxes, surcharge, cess of central and states which will be integrated in GST.

b. Goods and services which may be exempted from GST.

c. Interstate commerce – IGST- proportion of distribution between state and center.

d. Registration threshold limit for GST.

e. GST floor rates.

f. Special rates during calamities.

g. Provision with respect to special category states especially north east states.

15
 It may also work as Dispute Settlement Authority for GST.

The Council would consist of 2/3rd representation of states and 1/3rd representation of

the Centre. The GST Council will take all decisions regarding tax rates, dispute

resolution, exemptions and so on. Recommendations of the GST Council (75% votes)

will be binding on the Centre and the States.

GSTIN:

Goods and Services Identification Number is a 15-digit alphanumeric number.

First two digits shows the State code,

Another ten digits shows the Permanent Account Number (PAN).

Next number shows the entity number of the same PAN holder in a state.

Next is alphabet Z by default.

Next is the check sum digit.

GST Identification Number

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
States PAN Entity code
Code /Check digit

16
IMPACT OF GST ON REAL

ESTATE SECTOR

17
Impact of GST on real estate sector-

The pre-GST taxability of Real Estate Transactions:

Nature of Duty Rate of Tax When was tax required to be paid?

Or What triggered tax?

VAT* 1 to 4% On Sale of Under Construction Properties

Service Tax 4.5%

Registration Charges 0.5 to 1%

Stamp Duty Charges* 5 to 7%

VAT, Registration Charges, Stamp Duty Charges vary from state to state

VAT was not applicable on completed or ready to sale properties

Under the erstwhile indirect tax regime, CENVAT Credit on inputs used for the construction of a

building or a civil structure or any part thereof was restricted too.

18
 Taxability of Real Estate Transactions under GST

Particulars Applicability Rate of Input

Tax Tax

Credit

On ready-to-move (RTM) Not applicable – Because Sale of building is treated – Not

properties for which as activity or transaction which shall be treated available

completion certificates are neither as a supply of good nor a supply of service

issued as per SCHEDULE III of CGST Act,2017

On Under Construction Applicable as supply of services as per Schedule I 8%* Available

Properties (For Homes of CGST Act, 2017

Purchased Under Credit-

Linked Subsidy Scheme)

On Under Construction Applicable as supply of services as per Schedule I 12% Available

Properties (Other than of CGST Act, 2017

above)

19
On resale properties Not applicable – Not

available

On Land purchase and sale Not applicable. As per Schedule III, sale of land is – Not

neither supply of goods nor services. available

Works contract Applicable 18% Available

Composite supply of works Applicable 18% Available

Contract

Composite supply of works Applicable 12% Available

Contract to Government

Authorities

Composite supply of works Applicable 12% Available

contract – for use by

general public

Composite supply of works Applicable 12% Available

contract – Affordable

20
Housing

* NOTE: The homes purchased under the Credit-Linked Subsidy Scheme (CLSS) attracts 12%

GST rate. The applicable rate will be 8% after cutting the 1/3rd amount towards the cost of land.

Impact on Buyers:

Under the earlier tax regime, buyers had to pay VAT, Service tax, Registration charges & Stamp

duty on purchase of properties under construction. Also since VAT, Registration charges &

Stamp duty were state levies, prices of properties varied from state to state. Moreover,

developers had to pay various duties like sales tax (CST), custom duty, OCTROI etc. for which

credit was not available.

Under GST, a single tax rate of 12% is applicable on properties under construction while GST is

not applicable on completed or ready to sale properties which was the case in previous law.

Hence buyers will benefit from reduction of prices under GST.

In the short-term, buyers may stick to “wait and watch” approach to gain more understanding on

the impact of GST on property prices and defer buying decision.

Also, in the long term, GST will a positive impact on buyers if the benefit of input tax credit

received by the developer is passed on to the buyer.

21
Impact on Developers / Builders / Contractors

Under the previous tax regime, developers had to bear Excise duty, VAT, Customs duty, Entry

taxes etc. on raw materials / inputs and Service tax on various input services like approval

charges, architect professional fees, labor charges, legal charges etc. ITC was not available for

duties like CST, Customs duty, Entry Tax etc. This would impact the pricing and subsequently

the burden was transferred to the buyer.

Under GST, developers’ construction costs are significantly reduced as multiple taxes are

subsumed and due to the availability of input tax credit. Also, reduction in cost of logistics will

be an added benefit. Hence developers may see improvement in margins.

On the downside, developers have to do multiple calculations to arrive at ITC in order to pass it

on to the buyers. Hence, in most cases, they can pass on the ITC only during the final stages.

This lack of transparency on ITC, may affect the developers since buyers may resort to “wait and

watch” approach and defer buying decision.

And, in the erstwhile laws, a large portion of expenditure remained unrecorded in the books.

Under GST, availability of credit on inputs and cloud storage of invoicing has reduced under

recording of expenditure.

Impact on other Stakeholders:

The impact on the allied services like labor, material suppliers, service suppliers etc. depends on

the increase or decrease in the tax levied on these goods and services. This will have a

consequential impact on real estate industry as a whole.

22
For example, earlier cement was taxed at an effective rate of 27-31 percent which will now be

taxed at 18 percent. Increase in cement prices will result in consequential increase in the overall

cost of construction.

GST Rates for some of the goods relating to the construction industry are given below:

Product Rate of GST

Sand 5%

Sand and fly Ash Bricks 12%

Steel 18%

Paint 18%

Marbles and Granite 28%

Cement 18%

23
GST REGISTRATION & GST

RETURN

24
GST REGISTRATION -

1) Every person who is liable to be registered under Schedule III of this Act, shall apply

for registration in every such State in which he is liable within 30 days from the date of which he

becomes liable to registration, in such manner and subject to such conditions as may be

prescribed.

2) Not withstanding anything contained in sub-section (1), a person having multiple business

verticals in a State may obtain a separate registration for each business vertical, subject to such

conditions as may be prescribed.

3) A person, though not liable to be registered under Schedule III, may get himself registered

voluntary, and all provisions of this Act, as are applicable to a registered taxable person, shall

apply to such person.

4) Every person shall have a Permanent Account Number issued under the Income Tax Act,1961

(43 of 1961) in order to be eligible for grant of registration under subsection (1), (2) or (3).

5) Where a person who is liable to be registered under this Act fails to obtain registration, the

proper officer may, without prejudice to any action that is, or may be taken under this Act,

proceed to register such person in the manner as may be prescribed.

25
6) The registration or the Unique Identity Number, shall be granted or, as the case maybe,

rejected after due verification in the manner and within such periods as may be prescribed.

7) A registration or an Unique Identity Number shall be deemed to have been granted after the

period prescribed under sub-section (7), if no deficiency has been communicated to the applicant

by the proper officer within that period.

8) Notwithstanding anything contained in sub-section (7), any rejection of application for

registration under the CGST/SGST Act shall be deemed to be a rejection of application for

registration under the CGST/SGST Act.

9) The Central or State Government may, on the recommendation of the Council, by notification,

specify the category of persons who may be a exempted from obtaining registration under this Act.

26
GST registration page-

27
Amendment of Registration-

a) Every registered taxable person shall inform the proper officer of any changes in the

information furnished at the time of registration, or that furnished subsequently, in the

manner and within such period as may be prescribed. The proper officer may, on the

basis of information furnished under sub-section (1) or as ascertained by him, approve or

reject amendments in the registration particulars in the manner and within such period as

may be prescribed, provided that approval of the proper officer shall not be required in

respect of amendment of such particulars as may be prescribed.

b) The proper officer shall not reject the request for amendment in the registration

particulars without giving a notice to show cause and without giving the person a

reasonable opportunity of being heard.

c) Any rejection or approval of the amendments under the CGST/SGST Act shall bedeemed

to be rejection or approval of amendments under the CGST/IGST Act.

28
GST RETURN

29
GST RETURNS-

Every registered taxable person shall, for every calendar month or part thereof, furnish, in such
form and in such manner as may be prescribed, a return, electronically, of inward and outward
supplies of goods or services, input tax credit availed, tax payable, tax paid and other particulars
as may be prescribed within 20 days after the end of such month:

Provided that a registered taxable person paying tax under the provisions of Section 8 of this Act
shall furnish a return for each quarter or part thereof, electronically, in such form and in such
manners may be prescribed, within 18 days after the end of such quarter:

Every registered taxable person, who is required to furnish a return under sub-section (1) shall
pay to the credit of the appropriate Government the tax due as per such return not later than the
last date on which he is required to furnish such return.

A return furnishes under the sub-section (1) by a registered taxable person without payment of
full tax due as per such return shall not be treated as a valid return for allowing input tax credit in
respect of supplies made by such person. Every registered taxable person shall furnish a return
for every tax period under sub-section (1), whether or not any supplies of goods or services have
been effected during such tax period.

Note: Subject to the provisions of Section 25 and 26, if any taxable person after furnishing a
return discovers any omission or incorrect particulars therein, other than as a result of scrutiny,
audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission in
the return to be filed for the month or quarter, as the case may be, during which such omission is
noticed subject to the payment of interest, where applicable and as specified in the Act:

30
Types of GST Returns

S.NO. RETURN PARTICULARS

1 GSTR-1 Details of outward supplies of taxable goods or services.

2 GSTR-2 Details of inward supplies of taxable goods or services.

3 GSTR-3 Monthly return on the basis of details of inward and outward

supplies along with the payment of amount of tax.

4 GSTR-4 Quarterly Return for compounding taxable persons.

5 GSTR-5 Return for Non-Resident foreign taxable persons.

6 GSTR-6 Input Service Distributor return.

7 GSTR-7 Return for authorities deducting tax at source.

8 GSTR-8 Details of supply affected through e-commerce operator.

9 GSTR-9 Annual Return

31
1) What is GSTR-1?

GSTR-1 is a monthly return that should be filed by every registered dealer by the 10th of the
following month. It is the first or the starting point for passing input tax credit to the dealers. It
contains details of all outward supplies i.e. sales.

GSTR-1 has to be filed by "all" taxable registered persons under GST. However, there are certain
dealers who are not required to file GSTR-1, instead are required to file other different GST
returns as the case may be. These dealers are E-Commerce operators, Non-Resident dealers and
Tax deductions. It has to be filed even in cases where there is no business conducted during the
reporting month.

How to file GSTR-1?

The Suppliers need to log in to the GSTN portal with the given User ID and Password, following
these steps:
Search for "Services" and then click on Returns, followed by Returns Dashboard.

In the Dashboard, the dealer has to enter the financial year and the month for which the return
needs to be filed Click on Search after that.

All returns relating to this period will be displayed on the screen.

Dealer has to select the tile containing GSTR-1

After this, he will have the option either to prepare online or to upload the return.

The dealer will now Add invoices or upload all invoices directly.

Once the entire form is filled up, the dealer shall then Click on Submit and validate the data
filled up.

32
 With the data validated, dealer will now click on FILE GSTR-1 and proceed to either
E-Sign or digitally sign the form.

Another confirmation pop-up will be displayed on the screen with a yes or no option To the
return.
Once yes is selected, an Acknowledgement Reference Number (ARN) is generated.

2. What is GSTR-2?

It is mandatory to furnish details of inward supplies of goods/services received during a tax

period for every registered taxable person. These details are furnished based on FORM GSTR-
2A which is auto populated on the basis of GSTR 1 filed by your supplier, electronically through
the Common Portal, either directly or from a Facilitation Centre. However, GSTR 2A does not in
itself auto populates a complete GSTR 2, as there are certain other transactions which are to be
mentioned manually in addition to the data which is generated through GSTR 2A, viz. Details of
Inward Supplies from an Unregistered Persons on which tax is paid on the Reverse Charge basis
and Imports effected during the tax period, etc.

Who can file GSTR-2?

It is mandatory to file a GST Return for each and every entity registered under the GST Act.
Even in case where there are no inward supplies during the tax period, NIL return for that period
is required to be filed.

In case of failure to file the return within due period, the tax payer is penalized with the late fees
of INR 100 per day up to a maximum limit of INR 5,000/-

33
When to file GSTR-2?

Every registered taxable person is required to furnish details of Inward Supply for a tax period
i.e. the end of the relevant month.

This return has to be filed by the recipient of (goods/services) supplies within 15 days from the
end of the relevant tax period.

However to facility the ease of payment and return filing for small and medium scale
Businesses with annual aggregate turnover up to Rs.1.5 crores, it has been decided in the 22nd
GST Council meeting dated 06th October 2017, that such tax payers shall be required to file
quarterly returns in Form GSTR 1,2 and 3 and pay taxes only on quarterly basis, starting from
the third quarter of this financial year, i.e. October to December 2017.

3) What is GSTR-3?

GSTR-3 is a return to be filed on monthly basis (compounding and ISD taxpayers are
exceptions). GSTR-3 is more like a pooled version of GSTR-1 and GSTR-2. The form captures
the information of outward and inward supply information at aggregate level which will be auto
populated through GSTR-1, GSTR-1A and GSTR-2.It will comprise of the entire turnover
related details, including, local sales turnover, export sales turnover, exempted local sales
turnover, turnover except GST and taxable turnover. A taxpayer just has to validate this prefilled
information and make modifications if required.

4) What is GSTR-4?

Compounding taxpayers would have to file a quarterly return called GSTR-4. Taxpayers
otherwise eligible for the compounding scheme can opt against the compounding and file
monthly returns and thereby make their supplies eligible for ITC in hands of the purchasers.
Compounding taxpayer will also file a simple Annual return (GSTR-9)

34
5) What is GSTR-5?

Non –Resident Taxpayers would have to file GSTR-1, GSTR-2 and GSTR-3 returns for the
period for which they have obtained registration. The registration of Non–Resident taxpayers
will be done in the same manner as that of Regular taxpayers. Non-Resident Taxpayers would be
required to file GSTR-5 return for the period for which they have obtained registration within a
period of seven days after the date of expiry of registration. In case registration period is for
more than one month, monthly return(s) would be filed and thereafter return for remaining
period would be filed within a period of seven days as stated earlier.

6) Annual Return

Every registered taxable person, other than an input service distributor, a deduct or under Section
37, a casual taxable person and a non-resident taxable person, shall furnish an annual return for
every financial year electronically in such form and in such manner as may be prescribed on or
before the thirty first day of December following the end of such financial year. Every taxable
person who is required to get his accounts audited under sub-section (4) of section 42 shall
furnish, electronically the annual return along with the audited copy of the annual accounts and a
reconciliation statement, reconciling the value of supplies declared in the return furnished for the
year with audited annual financial statement, and such other particulars as may be prescribed.

Period of retention of accounts-

Every registered taxable person required to keep and maintain books of account or other records
under sub-section (1) of section 42 shall retain them until the expiry of sixty months from the last
date of filing of Annual Return for the year pertaining to such accounts and records: Provided
that a taxable person, who is a party to an appeal or revision or any other proceeding before any

35
Appellate Authority or Tribunal or Court, whether filed by him or by the department, shall retain
the books of account and other records pertaining to the subject matter of such appeal or revision
or proceeding for a period of one year after final disposal of such appeal or revision or
proceeding, or for the period specified undersub-section (1), whichever is later.

ACCOUNTS AND RECORDS

Every registered person shall keep and maintain, at his principal place of business, as mention in
the certificate of registration, a true and correct accounts of production or manufacture of goods,
of inward or outward supply of goods and services, of stocks of goods, of input tax credit
availed, of output tax payable and paid, and such other particulars as may be prescribed in this
behalf:
Provided that where more than one place of business is specified in the certificate of registration,
the accounts relating to each place of business shall be kept at such places of business concerned:
Provided further that the registered person may keep and maintain such accounts and other
particulars in the electronic form in the manner as may be prescribed.
The Commissioner may notify a class of taxable persons to maintain additional accounts or
documents for such purpose. Every registered taxable person whose turnover during a financial
year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a
cost accountant and shall submit to the proper officer a copy of the audited statement of
accounts, the reconciliation statement under sub-section (2) of section 30 and such other
documents in the form of manner as may be prescribed in this behalf.

Period of retention of accounts:

Every registered taxable person required to keep and maintain books of account or other records
under sub-section (1) of section 42 shall retain them until the expiry of sixty months from the last
date of filing of Annual Return for the year pertaining to such accounts and records: Provided
that a taxable person, who is a party to an appeal or revision or any other proceeding before any
Appellate Authority or Tribunal or Court, whether filed by him or by the department, shall retain
the books of account and other records pertaining to the subject matter of such appeal or revision

36
or proceeding for a period of one year after final disposal of such appeal or revision or
proceeding, or for the period specified under sub-section (1), whichever is later.

37
KEY FEATURES OF GST MODEL

38
Key Features of The GST Model-

The following are the key features of the GST model: -

1. Dual Goods and Service Tax: CGST and SGST

2. Inter-State Transactions and the IGST Mechanism: The Centre would levy and

collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and

services. The IGST mechanism has been designed to ensure seamless flow of input tax credit

from one State to another. The inter-State seller would pay IGST on the sale of his goods to the

Central Government after adjusting credit of IGST, CGST and SGST on his purchases (in that

order). The exporting State will transfer to the Centre the credit of SGST used in payment of

IGST. The importing dealer will claim credit of IGST while discharging his output tax liability

(both CGST and SGST) in his own State. The Centre will transfer to the importing State the

credit of IGST used in payment of SGST.

3. Destination-Based Consumption Tax: GST will be a destination-based tax. This

implies that all SGST collected will ordinarily accrue to the State where the consumer of the

goods or services sold resides.

4. Computation of GST on the basis of invoice credit method: The liability under

the GST will be invoice credit method i.e. cenvat credit will be allowed on the basis of invoice

issued by the suppliers.

5. Payment of GST: The CGST and SGST are to be paid to the accounts of the central and

states respectively.

39
6. Goods and Services Tax Network (GSTN):A not-for-profit, Non-Government

Company called Goods and Services Tax Network (GSTN), jointly set up by the Central and

State Governments will provide shared IT infrastructure and services to the Central and State

Governments, tax payers and other stakeholders.

7. INPUT TAX CREDIT (ITC) SET OFF: ITC for CGST & SGST will be taken for taxes

allowed against central and state respectively.

8. GST on Imports: Centre will levy IGST on inter-State supply of goods and services. Import

of goods will be subject to basic customs duty and IGST.

9. Maintenance of Records: A taxpayer or exporter would have to maintain separate details in

books of account for a ailment, utilization or refund of Input Tax Credit of CGST, SGST and

IGST.

10. Administration of GST: Administration of GST will be the responsibility of the GST

Council, which will be the apex policy making body of the GST. Members of GST Council

comprised of the Central and State ministers in charge of the finance portfolio.

11. Goods and Service Tax Council: The GST Council will be a joint forum of the Centre and

the States. The Council will make recommendations to the Union and the States on important

issues like tax rates, exemption list, threshold limits, etc. One-half of the total number of

Members of the Council will constitute the quorum of GST council.

40
Benefits of GST: -

To Traders: -

Reduction in multiplicity of taxes

Mitigation of cascading /double taxation.

More neutralization of taxes especially for exports.

Development of common national market.

Simpler tax regime.

To Government: -

Simpler Tax System

Broadening of Tax base

Improved compliance & revenue collections

Efficient use of resources.

Automation of compliance procedures to reduce errors and increase efficiency.

41
 CHAPTER-2

COMPANY PROFILE

42
ABOUT COMPANY

43
ABOUT COMPANY

Ircon International limited (IRCON), a government company incorporated by the Central

government (Ministry of Railways) under the Companies Act, 1956 on 28th April, 1976

originally under the name Indian Railways Construction Company Limited, is the leading

turnkey construction company in the public sector known for its quality, commitment and

consistency in terms of performance. Ircon has wide spread operations in several states in

India and in other countries (Malaysia, Nepal, Bangladesh, Mozambique, Ethiopia,

Afghanistan, U.K. Algeria & Sri Lanka).

IRCON is specialized construction organization covering the entire spectrum of

constructions activities and services in the infrastructure sector. However, Railways and

Highways Construction, EHP sub-station (engineering and construction), and MRTS are

the core competence areas of IRCON.

IRCON operates not only in highly competitive environment but also in difficult terrains

and regions in India and abroad and is an active participant in prestigious nations building

projects. IRCON has so far completed more than 300 infrastructure projects in India and

more than 100 projects across the globe in more than 21 countries.

44
The Company has a long standing reputation as a sectoral leader in Transportation

Infrastructure amongst the public sector construction companies in the Country with

specialization in execution of Railway Projects on turnkey basis or otherwise. IRCON is

known for its quality, commitment and consistency in terms of its performance.

After commencing business as a railway construction company it diversified

progressively since 1985 to roads, buildings, electrical sub-station and distribution,

airport construction, commercial complexes, as well as to metro works. It has been one of

the few construction companies in the public sector to have earned substantial foreign

exchange for the Country and paid dividend without fail every year to the Government.

As a construction organization, the Company operates in the entire spectrum of

construction activities and infrastructure services; Railways and Highway Construction,

Tunnels & Bridges, Railway Workshops, EHP sub-station (engineering and

constructions) and MRTS being the core competence areas.

The Company has executed many landmark construction projects in the last 41 years both

in India and abroad. In India, in particular, it has also been undertaking projects even in

difficult terrains and disturbed regions. The Company has so far completed more than

120 projects in more than 24 countries across the globe, and 376 projects in India. The

Company is an ISO certified Company for Quality, Environment, and Occupational

Health and Safety Management Systems, a Schedule ‘A’ public sector company, and a

Mini Ratna – Category I.

45
LEGAL STATUS AND AUTONOMY

The Company, a legal entity separate from the Government, is legally, functionally, and

financially autonomous, operates under the corporate laws as an independent commercial

enterprise, does not receive any budgetary or financial support from the Government, nor

is it a dependent agency of the Government. However, the Government of India through

the Ministry of Railways and the Department of Public Enterprises under the Ministry of

Heavy Industries and Public Enterprises monitors its performance through a system of

Memorandum of Understanding (MOU) as regards targets to be achieved every year as

part of accountability to the Parliament in respect of all government companies.

Government can issue and does issue guidelines to regulate and bring about some

uniform pattern in the functioning of the Company as a public sector company. However,

no Government department has any supervisory authority to exercise control over the

Company which is managed and run under the superintendence, control, and direction of

its Board of Directors as per the Companies Act.

BUSINESS ENVIRONMENT

India is not only among the world’s fastest growing major economies, but also one of the

few economies enacting major structural reforms. Indian economy registered a growth of

7.1% for the financial year 2016-17 in the backdrop of two major domestic development

46
viz. demonetization of two highest denomination notes in November 2016, and

subsequently implementation of Goods & Service Tax (GST) in July 2017.

To make this growth rate consistent and enduring, the government continues with its

initiatives on economic reforms, increase in public investment in infrastructure and

development projects, export growth etc. A total allocation of Rs. 3,96,135 crore for

infrastructure development in 2017-18 would afford business opportunities for your

Company. The historic step of merger of the Railways Budget with the General Budget

would facilitate multi-modal transport planning between railways, highways, and inland

waterways.

VISION & MISSION

VISION

To be recognized nationally and internationally as a specialized construction

organization comparable with the best in the field covering the entire spectrum of

construction activities and services in the infrastructure sector.

MISSION

i. To effectively position the company so as to meet the construction needs of the

infrastructure development as per the changing economic scenario in India and

abroad.

47
 ii. To earn the global recognition by providing high quality products and services in

times and in conformity with the best engineering practices as well as good

corporate governance and customer satisfaction.

FINANCIAL PROFILE

The operating income of the company has registered an increase of 24% from Rs. 2419

crore in 2015-16 to Rs. 2995 crore in 2016-17, though profit before tax has decreased by

12% from Rs. 602 to Rs. 532 crore during the corresponding period. Indian project has

contributed 90% to the total income of Rs. 3254 crore.

IRCON has allotted bonus shares in January 2017 in the ratio of 4:1 i.e. bonus (equity)

shares for every one equity share held by the shareholders thereby increasing the paid up

capital from Rs. 19.796 crore to Rs. 98.98 crore.

FINANCIAL PERFOMANCE INDICATOR

S. Particulars 2016-2017 2016-2015 Increase/

No. Decrease

(In %)

1 Total income/turnover 3254 2860 14%

2 Total operating income / 2995 2419 24%

turnover

48
3 Operating income from 327 409

foreign projects 20%

4 Operating income from 2668 2010

Indian projects

5 Profit before tax 532 602 33%

6 Profit after tax 369 395

7 Net worth 3828 3667

8 Dividend 192.40* 168.26 12%

7%

4%

14%

BOARD OF DIRECTORS

As on 31st March 2017, the strength of Board of Directors was nine comprising four whole-time

directors, two government nominated directors, and three independent directors. The details are

as follows:

1) Mr. S.K. Chaudhary w.e.f.

Chairman & Managing Director 29.10.2016

2) Mr. M.K. Singh w.e.f.

49
 Director Finance 01.05.2016

3) Mr. Deepak Sabhlok w.e.f.

Director Projects 16.04.2016

4) Mr. Hitesh Khanna w.e.f.

Director Works 07.03.2011

5) Mr. Rajiv Chaudhary w.e.f.

Part-time (Official) Director 17.11.2016

6) Mr. S.C. Jain w.e.f.

Part-time (Official) Director 03.01.2017

7) Mr. S.K. Singh w.e.f.

Independent Director 05.04.2017

8) Mr. Avineesh Matta w.e.f.

Independent Director 08.04.2016

9) Prof(Ms.) Vasudha V. Kamat w.e.f.

Independent Director 22.04.2016

OPERATIOAL PROFILE

During 2016-17, IRCON has completed four projects, two in India and one each in

Bhutan and Bangladesh. Ircon is having pan India presence through more than 24

projects across various states of India. In addition, the company executing projects in

Bangladesh, Algeria, and South Africa.

50
The product mix of IRCON is varied and includes signaling projects, electrical sub-

stations, and road over bridges, buildings, road projects from NHAI, apart from railway

projects of track laying, up gradation, doubling, railway sidings, coal connectivity

projects, redevelopment of stations, etc.

The mode of execution of some of these projects is EPC whereas road projects from

NHAI are being executed through wholly owned subsidiary companies (WOS) formed

for this purpose, and coal connectivity projects are being executed through joint venture

companies formed as a strategic alliance with other PSUs, Ircon’s equity stake in such

JVs being 26%.

Subsidiary and Joint Venture Companies

Ircon had four subsidiary companies viz. IrconISL, IRSDC, IrconPBTL, and IrconSGTL

as on 31 March 2017. After the close of the year, one wholly owned subsidiary (WOS)

company by the name IrconDHHL got incorporated on 11th May 2017, whereas IRSDC

ceased to be a subsidiary company after transfer of 1% equity stake (out of 51% held by

IRCON) to RLDA. The present status of IRSDC is joint venture Company having 50:50

equity participates on by IRCON and RLDA.

Corporate Governance, CSR and Sustainability

IRCON is committed to good governance, and complies with the requirements of

corporate governance under the DPE Corporate Governance Guidelines, and other legal

51
requirements. During the year, your Company has spent an amount of Rs. 5.89 crore

towards Corporate Social Responsibility (CSR) initiatives. The CSR initiatives, aimed at

conducting business in a sustainable manner, broadly comprise of activities in the field of

health, sanitation, education, employment enhancing education including education for

differently abled, environment, infrastructure development, etc. To keep pace with new

developments in the area of CSR, IRCON has revised its CSR and Sustainability policy

in May 2017.

OPERATIONAL PERFORMANCE

A. Foreign Projects Completed

IRCON has completed two projects (one in Bhutan and another in Bangladesh) during

the financial year 2016-17.

Bhutan

1. The turnkey project for dismantling of existing 66/33/11 KV sub-station and Design,

Engineering, Construction, Supply, Erection, Testing and Commissioning of New

2x20 MVA, 66/33 KV sub-station including all associated works at Paro in Bhutan

by Bhutan Power Corporation Limited, at a value of Rs. 23 crore, has been

completed in March 2017

Bangladesh

2. The project for construction of 2nd Bhairab Railway Bridge with Approach Rail

Lines (Lot-A) — being undertaken through unincorporated JV between your

52
 Company and AFCONS viz. IRCONAFCONS JV, at a revised value of Rs. 265

crore (Ircon’s share), has been completed in March 2017.

B. On-going Foreign projects:

Ircon is executing the following four projects in foreign countries:

Bangladesh

1. Design, Supply, Installation, Testing, and Commissioning of Computer based

Interlocking Color Light Signalling System on turnkey basis at 11 stations

between Ishurdi-Darsana sections of Bangladesh, at a value of Rs. 60 crore.

Physical work has been completed in July 2017. The work is scheduled to be

commissioned in September 2017.

2. Construction of Embankment, Track, all civil works, major & minor bridges

(Except Rupsha) & culverts and implementation of EMP against Package WD1

under the project Construction of Khulna-Mongla Port Rail Line for Bangladesh

Railway, at a value of Rs. 971 crore (USD 147.80 million). The physical progress

up to July 2017 is10%. The work was commenced in March 2016 and is

scheduled to be completed in September 2019.

The project is progressing slowly due to non availability of encumbrance free

land and non issuance of drawings for bridges and buildings by the client.

53
Algeria

3. Installation of double track line (93 kms) in Algeria awarded by ANESRIF,

Ministry of Transport, Government of Algeria, at a value of Rs. 1103 crore

(converted in INR) involving construction of second line and up gradation of

existing line from Oued-Sly to Yellel in Alger-Oran section of Algerian

Railways. The value of contract including additional works for realization of

double line has been revised to Rs. 1944 crore (converted in INR). Though the

project was awarded in 2008, but it was suspended by the client in January 2009

and restarted in May 2010.

The completion time has been extended by client up to 10th May 2018.The

modalities of payment to the local subcontractor were not spelled in the

amendment and were later negotiated with the client, which hampered the cash

flow and project progress. Eventually, the mode of payment to the local sub-

contractors and revision of the price were negotiated by a high level committee in

July 2016 paving the way for smooth progress of the project. Lack of sufficient

funds with the client is likely to affect the completion period of the project.

South Africa

4. Procurement of Plant Design, Supply and Installation of Overhead Track

Equipments, Traction Sub-stations, Auxiliary Power Supplies Substations, Bulk

Power Supplies Switching Stations and Signalling Systems for Majuba Rail

54
 Project, South Africa, for Eskom Holdings SOC Limited, at a value of Rs. 346

crore (Rand 663 million, Rand 1 = 5.212). The work has been secured in

November 2015. During the operation of contract, Foreign Currency issue arose

which has been resolved. The work is in progress and likely to be completed by

31st March 2018.

C. Project Completed in India:

In March 2017, following two projects at a total value of Rs. 178 crore got completed

in India for Delhi Metro Rail Corporation Limited (DMRC):

• Contract KT-4: Design, Supply, Installation, Testing and Commissioning of Ballastless

Track of Standard Gauge in elevated section of Aluva to Petta corridor, and

• Contract KT-5R1: Supply, installation, testing, and commissioning of standard gauge

track work in Muttom Depot of Kochi Metro Rail Limited.

D. New Projects in India:

During 2016-17, your Company secured following projects in India:

55
1. Construction of Corridor-III of East-West Corridor between Gevra Road to

Pendra Road approximately 135 km, feasibility study of East-West Corridor

between Gevra Road to Penra Road in the State of Chhattisgarh, for Chhattisgarh

East-West Railway Limited (CEWRL), at an estimated project cost of Rs. 2840

crore as per approved Detailed Project Report (DPR).

2. Survey, Feasibility study, Detailed Design and Construction of various identified

Rail Coal Connectivity Project(s), for Jharkhand Central Railway Limited

(JCRL), at an estimated project cost Rs. 1365 crore as per approved DPR.

3. Survey, Feasibility study, Detailed Design and Construction of various identified

Rail Coal Connectivity Project(s), for Mahanadi Coal Railway Limited (MCRL),

at an estimated project cost of Rs. 1075 crore.

4. Execution of rail connectivity projects identified by Bastar Railway Private

Limited (BRPL), at an estimated project cost of Rs. 1406 crore.

5. Akhaura – Agartala Rail Link project, for North Frontier Railway, at an estimated

project cost of Rs. 574 crore as per approved DPR, out of which Rs. 211 crore

has been considered for the year’s order book.

56
 6. Additional work of Design, Drawing and Construction of External Development

works & External Services at National Institute of Technology (NIT), Mizoram,

at a value of Rs. 330 crore.

7. Six-Laning of Davanagere-Haveri (from Km. 260+000 to Km. 338+923) of NH-

48 in the State of Karnataka to be executed (through incorporation of a

subsidiary) on Hybrid Annuity Project on DBOT Annuity under NHDP – Phase

V – EPC Cost, for NHAI, at a value of Rs. 1095 crore.

E. New Projects secured after the close of the year:

After the close of the year 2016-17, IRCON secured following projects in India

1. Visakhapatnam (Diesl Loco shed) – Augmentation of shed for homing 100

HHP locomotives, for East Coast Railway, at a value of Rs. 61.75 crore.

2. Katni Grade Seperator / by pass line (21.50 Km) Project, for West Central

Railway at an estimated cost of Rs. 582.13 crore.

3. Re-development of Safdarjung Railway Station, for RLDA and Ministry of

Railways at an estimated cost of Rs. 261.72 crore.

57
 4. Railway electrification work for Katni-Singrauli, for East Central Railway, at

an estimated cost of Rs. 258 crore.

5. Mathura-Kasganj-Kalyanpur Railway Electrification Project with Signalling,

for East Central Railway at an estimated project cost of Rs. 305.90 crore.

COMPLIANCES:

1) Official language:

During the year, various novel and encouraging initiatives have been undertaken for

pervasive us of Hindi in the office. Some of them are:

a) Pledge by all employees to work in Hindi completely on every last Monday of the

month.

b) First ever “Rajbhasha Sanghosthi” was held in Corporate Office which is now

planned to be conducted every quarter.

c) Birthday wishes to employees are being displayed in Hindi at the reception. In

addition, regular quarterly meetings of Official Language Implementation

Committee and workshops for effective use of the Unicode system and official

58
 language are being conducted. Bilingual facility has been introduced for computer

systems and mobile phones used by officials of the Company. Officers and staff

are being encouraged through various incentive schemes for implementation of

the annual program of the Official Language Department. Bilingual formats have

been made available at Ircon’s internal website for use by the employees. A

thought and a word in Hindi is displayed at the reception which is contributed by

different departments on rotational basis.

2) Right to Information Act, 2005:

As per the requirements of the RTI Act, necessary updated information including the

names of Appellate Authority, Central Public Information Officer, State Level Public

Information Officer and Assistant Public Information Officer are posted on Ircon’s

website. Queries received are replied within the stipulated time. The queries are usually

in the nature of service matters, related to finance, contract, and projects. The details of

RTI cases have been forwarded to the Ministry of Railways for publication on the

website of Central Information Commission (CIC) website on quarterly as well as annual

basis. During the year, out of 204 applications / appeals received 191 applications

(inclusive of 1st appeal) have been processed / disposed off.

59
PERSONNEL DEVELOPMENT

Cordial and harmonious industrial relations prevailed in the Company during the year. The total

manpower strength as on 31 March 2017 stood at 1495, which included 1183 regular employees,

47 deputationists, and 265 employees on contract (including service contract). 1004 employees

of the Company were technically and professionally qualified. The total number of women

employees was 68. There were a total of 241 scheduled caste / scheduled tribe employees as on

31st March 2017.

IRCON has been continuously taking steps for building capacity of its human resource through

training in functional and general management areas, contract & arbitration, leadership,

information technology, as well as soft skills. External faculty is arranged wherever required and

officials are nominated for workshops, seminars, etc. with reputed institutes. During the year

2016-17, a total 912 man-days training was imparted to officials of Ircon through workshops,

seminars, conferences, in-house trainings and training in external institutes, etc.

Ircon has various schemes for staff welfare like educational scholarships, one-time educational

grant for admission to professional degrees and diploma courses, educational awards to

meritorious children of employees, educational assistance to the wards of deceased employees,

assistance for marriage of daughters and dependent sisters of group ‘C’ and ‘D’ employees, etc.

An award was introduced for meritorious wards of Ircon employees who secured gold medal in

professional courses. In addition to facility of homeopathy and allopathy treatment at corporate

office, yoga classes are also conducted for overall well-being of the employees. Other facilities

60
like immediate financial assistance and guidance are being provided to employees and their

family members in case of any medical exigency, lump sum exgratia payment to family

members in case of death of serving employee.

IRCON aims to provide congenial and safe working atmosphere to women employees. The

Company has a complaints committee for prevention of sexual harassment at work place.

Further, provision pertaining to prohibition of sexual harassment has also been incorporated in

Ircon Conduct, Disciplinary, and Appeal Rules. No complaints relating to sexual harassment has

been received by the Company during the year. The Company, on International Women’s day,

arranged one workshop during the year, exclusively for women employees for creating

awareness on health related issues. Inter-project Quiz programmes and Debate competition were

conducted for the employees of Ircon. Winning team and the runners up were awarded cash prize

and certificate of commendation.

QUALITY, ENVIRONMENT, AND HEALTH & SAFETY MANAGEMENT

Quality Management System (QMS) has been successfully sustained and continually improved

since 1996 when the Company as a whole was first certified for ISO-9002-1994 by TUV

Suddeutschland Private Limited (TUV). Your Company has continued the certification and

sustained the system as per latest revised code ISO 9001:2015 (by periodical re-certification

audit after expiry of every three years). Latest re-certification audit has been conducted in March

61
2017, whereby the Company has been re-certified by TUV for a period of another three years i.e.

up to June 2020.

During the year, the Company has started working on development of mobile phone / web based

video library, and for this purpose two topics have been identified viz. Construction of

Embankment (Mechanized) in 3D format and Personal Safety & safety in construction in 2D

format. The mobile / internet based application on personal safety and safety in construction has

been released and is available on Ircon’s internal website.

Environmental friendly equipment such as solar panels has been installed and are being installed

at various offices / projects. Waste water is recycled at Corporate Office through Sewage

Treatment Plant (STP), and the same is used for horticulture work. STPs are also being

constructed at Noida, Guru Gram, and MFC buildings. LED lights, sensor lights and sensor taps

are being used in Corporate Office to conserve electricity and water. Various environment

friendly steps like use of fly ash brick instead of clay brick, rain water harvesting arrangements,

sensor controlled Cromium Plate (CP) fittings, use of latest version of fecade glass (glass in

building) to make the building sustainable etc. are being taken up across various offices / projects

of the Company. Monitoring of water usage and waste water, ambient air quality and noise

quality is also being carried out at various construction sites. The Company is emphasizing on

providing clean environment by initiating indoor air quality monitoring in the Corporate Office

building. Tree plantation is also undertaken by corporate office and project offices.

62
TECHNOLOGY ABSORPTION AND UPGRADATION

Supervisory Control and Data Acquisition System (SCADA) for energy management have been

made operational at Rail Coach Factory, Rae Bareli. Further, the Company has constructed all

sub-station buildings in DMRC with latest energy efficient and environmental friendly

guidelines which includes LED lights, Rain Water harvesting.

For the first time in Indian Railways, Overhead Equipment (OHE) design for Railway

Electrification Project is being carried out by using Drone camera for picking the coordinates and

Geographical Information System (GIS). The OHE layout plans are then prepared with the help

of AutoCAD. Ircon has also planned for use of Drone Camera for Katni Singrauli Doubling

project.

A concept paper on adoption of Semi High Speed on existing routes was presented in IPWE

Seminary in January 2017.

63
RESEARCH AND DEVELOPMENT

IRCON does not undertake any pure research project but takes the help of consultants and firms

to innovate and to develop methods and techniques to execute projects in a cost effective

manner, with requisite quality, to enhance the technological competence and efficiency.

INFORMATION TECHNOLOGY AND DEVELOPMENT OF ERP

With an objective to enable IT facility in all domain, efforts were directed towards enhancement

of SAP ECC 6.0 based Finance-Controlling module to incorporate additional functionalities like

fixed asset accounting for calculation of depreciation as per Indian Income Tax Act, Bank

Reconciliation System, FOREX reporting in Functional currency, local currency and reporting

currency, Implementation of IndAS functionality (age analysis and discounting of Financial

Asset and liability),

reports for quarterly and annual financial statements as per schedule III of the Companies Act,

2013; implementation of E-recruitment system on SAAS model with functionalities like on-line

submission of application with payment gateway, generation of admit card and communication

through SMS / e-mail with the applicants, conducting online written test, instant publication of

64
results; installation of video conferencing system for conducting review meetings with Project

Heads, training, promotion interviews etc.; hiring data centre services for SAP ERP application

to gain enhanced efficiency, security, and flexibility for capacity augmentation; revamping

company’s responsive internet website etc.

To reduce paper usage and transparent working, use of IT has been enhanced in all the

functional domains.

AWARDS

IRCON had received following awards during the year 2016-17:

1. India Pride Awards 2015-16 instituted by Dainik Bhaskar for ‘Excellence in Public

SectorUndertaking – Central in CSR/Environment Protection and Conservation’. The

award was presented by Mr. VenkaiahNaidu, Hon’ble Union Minister for Urban

Development to Mr. Mohan Tiwari, former Chairman & Managing Director, Ircon, at a

function held in New Delhi on 4th April 2016.

2. Dun & Bradstreet Infra Awards 2016, in the category of “Best Infrastructure

Project: Setting up of Rail Coach Factory, Rae Bareli at Lalganj (U.P.) Phase-I

Project”. The award was presented by Mr. Mansukh L. Mandaviya, Hon’ble Minister of

State for Transport & Highways to Mr. M.K. Singh, Director Finance, Ircon, at a

function held in New Delhi on 8th November 2016.

65
3. Governance Now 4th PSU Awards 2016 in the category of “HR Initiative

(Miniratna I)”. The award was presented by Mr. Ram Villas Paswan, Hon’ble Union

Minister for Consumer Affairs, Food and Public Distribution, to Ms. Anupam Ban,

General Manager/HRM, Ircon, at a function held in New Delhi on 23rd December 2016.

4. CIDC Vishwakarma Award 2017 from Construction Industry Development Council

(CIDC) in the category of Best Construction Project for Railways Coach Factory,

Rae Bareli. The award was presented to Mr. S.K. Chaudhary Chairman & Managing

Director; Mr. Deepak Sabhlok, Director Projects; Mr. Dwarika Prasad, Executive

Director (Rae Bareli);, and Mr. A.K. Goyal, Executive Director (Projects); at a function

held in New Delhi on 7th March 2017.

5. As per Dun & Bradstreet India’s Top PSUs 2016 Certificate released on 22nd August

2016, Ircon ranks 93 on the basis of Total Income.

66
SOME OF THE ON-GOING MAJOR PROJECTS IN INDIA

Rs. In

Crore

Sl. Name of the Project Project/

No. Revised

value

1 Katra-Qazigund section including Dharam-Qazigund section, Km 33.09

to 39.00 and Km 61.00 to 91.00, including additional works, for Northern

Railway

2 Setting up of new Rail Coach Factory at Rae Bareli, including additional 2973

works, for Ministry of Railways.

3 Design and Construction of Civil, Building and Track Works of Vaitarna- 2116

Sachin Section of Dedicated Freight Corridor Project, CTP-12, for

Dedicated Freight Corridor Corporation of India Limited (DFCCIL)

4 Construction of Corridor-I of East Corridor between Kharsia to 1424

Dharamjaygarh and Spur Line in the State of Chhattisgarh, for

Chhattisgarh East Railway Limited.

5 Sivok-Rangpo New Rail Line Project, for North Frontier Railway. 1339

6 Construction of Road Over Bridges (RoBs) in the State of 1335

a) Bihar (Phase – I & II), for Ministry of Railways and Government of (Bihar)

Bihar 618

b) Rajasthan, for Ministry of Railways and Government of Rajasthan (Rajasthan)

67
 c) One RoB on State owned Road (other than NHs) in Bihar through its

funds on 1st Km at Manpur by-pass in Gaya District, Bihar for Road

Construction Department, Government of Bihar

7 Implementation of PMGSY in Bihar State for Government of Bihar 1012

8 RAPDRP – Part B Project under Jammu province (Cluster – I, Jammu 612

left), (Cluster-II, Jammu Right) and (Cluster IV) (Akhnoor, Rajouri,

Poonch, Udhampur, Doda, Kishtwar & Bhaderwah), for J&K Power

Development Department.

9 Widening and Strengthening of existing Bikaner-Phalodi section to Four- 646

lane from Km. 4.200 to Km. 55.250 and Two-Lane with paved shoulder

from Km. 55.250 to Km. 163.500 of NH-15 on BOT (Toll) basis in the

State of Rajasthan, for Ircon PB Toll way Limited.

SUBSIDIRIES AND JOINT VENTURE COMPANY

Subsidiaries companies

1. Ircon Infrastructure & Services Limited (IrconISL)

IrconISL, a wholly owned subsidiary of Ircon, was incorporated on 30th September 2009

and obtained a Certificate of Commencement of Business on 10th November 2009. The

main object of IrconISL is to undertake infrastructure projects including planning,

designing, development, improvement etc. in the field of construction of Multi Functional

Complexes (MFCs), etc., to provide facilities and amenities to users of Indian Railway

68
 System, and to carry on the business of hire purchasing, leasing of all kinds of moveable

and immoveable properties, to provide consultancy for all kinds of engineering projects

including providing maintenance, support, and all kinds of services including social

welfare measures, etc. During the year 2016-17, IrconISL has executed consultancy

project of Ministry of External Affairs (MEA) for preparation of feasibility report and

Detailed Project Report (DPR) for Bridge Project in Myanmar, and preparation of DPR

for road project in Rakhine state.

During the year, IrconISL had achieved an operating income of Rs. 40.98 crore, and

earned profit before tax of Rs. 20.81 crore and profit after tax of Rs. 12.36 crore.

2. Indian Railway Stations Development Corporation Limited (IRSDC)

IRSDC, a subsidiary company of Ircon and JV Company with Rail Land Development

Authority (RLDA), was incorporated on 12th April 2012 and obtained a Certificate of

Commencement of Business on 9th May 2012. The main objects of IRSDC is to develop /

re-develop the existing / new railway station(s) which will consist of upgrading the level

of passenger amenities by new constructions/ renovations including re-development of

the station buildings, platform surfaces, circulating area, etc., to better standards so as to

serve the need of the passengers in India, and commercial development of land/ air space.

The equity participation of Ircon and RLDA in IRSDC is in the ratio of 51:49

respectively.

69
IRSDC has been entrusted with development of 13 stations located at Chandigarh, Habibganj

(Bhopal), Shivaji Nagar (Pune), Bijwasan (New Delhi), Anand Vihar (Delhi), Surat and

Gandhinagar (Gujarat), and SAS Nagar (Mohali) Punjab, Gandhinagar (Jaipur), Amritsar,

Gwalior, Nagpur and Baiyappanhalli (Benguluru) for development/re-development. The status of

re-development of railway station by IRSDC is as follows:

(i) Chandigarh Railway Station - proposal sent to Railway Board for taking up re-

development work on EPC mode, decision awaited;

(ii) (ii) Habibganj Railway Station - contract for redevelopment of this station has

been awarded, wherein the station will be modernized through commercial

development of land and maintained through retail and advertising revenues,

physical work has started;

(iii) Shivajinagar Railway Station - development is under approval by Pune Municipal

Corporation;

(iv) Bijwasan and Anand Vihar Railway Station - bidding process is in advance

stage;

(v) (v) Surat Railway Station - planned to be re-developed as a Multi Modal

Transportation Hub through a Joint Venture Company and pooling of land by the

Central, State, and Local Government;

70
 (vi) Gandhinagar Railway Station - work taken up through a JV company between

IRSDC (MoR) and Gujarat Industrial Development Board (GIDB) (GoG) on

EPC mode;

(vii) SAS Nagar Mohali Railway Station - found to be unviable and has been

proposed for de-entrustment.

3. Ircon PB Toll-way Limited (IrconPBTL)

IrconPBTL, a wholly owned subsidiary of Ircon, was incorporated as a Special Purpose

Vehicle on 30th September 2014, and has obtained approval for, commencement of

business on 14thNovember 2014. The main object of IrconPBTL is to carry on the

business of widening and strengthening of the existing Bikaner & Phalodi Section to four

lane from 4.200 km to 55.250 km and Two Lane with paved shoulder from 55.250 km to

163.500 km of NH-15 on Build, Operate, and Transfer (BOT) (Toll) basis in the State of

Rajasthan, in accordance with the terms of the Concession Agreement signed with

National Highways Authority of India (NHAI) on 7th November 2014.

4. Ircon Shivpuri Guna Tollway Limited (IrconSGTL)

IrconSGTL, a wholly owned subsidiary of Ircon was th incorporated as a Special Purpose

Vehicle on 12 May 2015 and has obtained approval for commencement th of business from

71
the Registrar of Companies on 27 May 2015. The main objects of IrconSGTL is to carry on

the business of four laning of Shivpuri-Guna section of NH-3 from 236.00 km to 332.1 km

on Build, Operate, and Transfer (BOT) (Toll) basis on Design, Build, Finance, Operate and

Transfer ‘DBFOT’ pattern under NHDP Phase-IV in the State of Madhya Pradesh and other

ancillary works relating thereto, in accordance with the terms of the Concession th

Agreement, signed with the NHAI on 15 June 2015. In terms of the concession agreement,

IrconSGTL rd attained financial close on 23 November 2015 i.e. date of execution and

signing of the loan agreement with Ircon for a value of Rs. 722.11 crore. Other conditions set

forth in the Concession Agreement as Conditions Precedent to Declaration of Appointed

Date viz. signing of Escrow Agreement (between IrconSGTL, Ircon, Indian Overseas Bank,

and NHAI) and Substitution Agreement (between NHAI, the IrconSGTL, and Ircon) were

completed on 4 December 2015. th NHAI had declared 25 January 2016 as the appointed

date for commencement of construction, with construction period of 910 days, for which

Ircon has been appointed as EPC contractor. The Commercial Date of Operations would be

notified after completion of construction (scheduled in July 2018) and issue of completion

certificate by NHAI for operationalization of toll plaza and levy of toll fees. The

Construction work is progressing as per the schedule except for delay on account of no

availability of encumbrance free land. Financials of IrconSGTL: The authorized share capital

of IrconSGTL is Rs. 150 crore and its subscribed and paid-up share capital is st Rs. 150 crore

as on 31 March 2017. During the year, IrconSGTL has made two Rights issue of equity

shares of Rs. 80 crore subscribed by Ircon in July 2016 (Rs. 50 crore) and October 2016 (Rs.

30 crore). During the year, IrconSGTL had achieved revenue from operations (operating

turnover) of Rs. 294.12 crore, and earned profit before tax of Rs. 0.61 crore and profit after

72
 tax of Rs. 0.39 crore. 5. Ircon Davanagere Haveri Highway Limited (IrconDHHL) After the

close of the year, your Company has formed another wholly-owned subsidiary company by

the name ‘Ircon Davanagere Haveri Highway Limited’ (IrconDHHL) on 11 May 2017,

pursuant to conditions of award of Davanagere Haveri Project in the State of Karnataka by

NHAI. The main objects of IrconDHHL is to undertake the business of development,

maintenance and management of National Highway No. 48 (Old NH-4) including the section

from Km 260.00 to Km 338.923 (approx. 78.923 Km) on Davanagere – Haveri Section of

National Highway No. 48 (Old NH-4) in the State of Karnataka by six-laning thereof on

design, build, finance, operate and transfer basis. IrconDHHL has signed the concession

agreement with NHAI on 19 June 2017. IrconDHHL is yet to submit relevant documents to

NHAI to achieve financial close. Execution of the project would be taken up after achieving

financial close and intimation of appointed date by NHAI. Financials of IrconDHHL: The

authorized share capital of IrconDHHL is Rs. 5 crore and its subscribed and paid-up share

capital is the Rs. 5 lakh as on 30 June 2017.

5) Ircon Davanagere Haveri Highway Limited (IrconDHHL)

After the close of the year, your Company has formed another wholly-owned subsidiary

company by the name ‘Ircon Davanagere Haveri Highway Limited (IrconDHHL) on 11 May

2017, pursuant to conditions of award of Davanagere Haveri Project in the State of Karnataka

by NHAI. The main objects of IrconDHHL is to undertake the business of development,

maintenance and management of National Highway No. 48 (Old NH-4) including the section

from Km 260.00 to Km 338.923 (approx. 78.923 Km) on Davanagere – Haveri Section of

73
 National Highway No. 48 (Old NH-4) in the State of Karnataka by six-laning thereof on

design, build, finance, operate and transfer basis. IrconDHHL has signed the concession

agreement with NHAI on 19 June 2017. IrconDHHL is yet to submit relevant documents to

NHAI to achieve financial close. Execution of the project would be taken up after achieving

financial close and intimation of appointed date by NHAI. Financials of IrconDHHL: The

authorized share capital of IrconDHHL is Rs. 5 crore and its subscribed and paid-up share

capital is Rs. 5 lakh as on 30 June 2017.

Joint venture companies

1) Ircon-Soma Toll way Private Limited (ISTPL)

A joint venture company called ‘Ircon-Soma Toll way Private Limited’ (ISTPL) was

1incorporated on 19th April 2005, with 50% equity participation by both Ircon and Soma

Enterprise Limited (a construction company in private sector), for executing a BOT

project for four laning of Pimpalgaon-Dhule section of NH-3 from km 380 to km 265 in

Maharashtra for NHAI. The BOT project for four laning of Pimpalgaon-Dhule section

got completed in 2010-11 and accordingly, ISTPL is earning toll on the entire stretch of

118.158 km. Financials of ISTPL: The authorized share capital of ISTPL is Rs. 130 crore

and its subscribed and paid-up share capital is Rs. 127.74 crore (Ircon’s share being Rs.

63.87 crore) as on 31stMarch 2017. During the year, ISTPL has achieved operating

turnover of Rs. 153.34 crore as compared to Rs. 157.23 crore achieved during the

74
 previous year, and earned profit after tax of Rs. 11.69 crore against profit of Rs. 5.91

crore incurred during the previous year.

2) Chhattisgarh East Railway Limited (CERL)

A joint venture company called ‘Chhattisgarh East the Railway Limited’ (CERL) was

incorporated on 12thMarch 2013, with equity participation by South Eastern Coalfields

Limited, Ircon, and Chhattisgarh State Industrial Development Corporation Limited

(nominee of Government of Chhattisgarh) in the ratio of 64:26:10 respectively, for

development of coal connectivity corridor i.e. East Corridor (length 180 Km) in the State

of Chhattisgarh. CERL had obtained the Certificate for Commencement of Business on

7thMay 2013.

The CERL has signed concession agreement on 12thJune 2015 with Ministry of

Railways, for Chhattisgarh East Railway Corridor - Phase I in the State of Chhattisgarh

(Total 104.157 km). Phase I of the project is being implemented for Build, Own, Operate,

and Transfer (BOOT) model for PPP projects. Detailed Project rd Report (DPR) has been

approved on 3rd May 2016 by Zonal Railways viz. South Eastern Central Railway with

inflated mileage proposed by the Ministry of Railways.

75
 Financial closure is in progress and likely to be completed by 30thSeptember 2017. The

project progress is infringing due to stay by National Green Tribunal (NGT) payment of

compensation on account of Rehabilitation and Resettlement to land holders. So far only

67% disbursement has been completed by State Revenue officials and balance as

committed by State Government would be completed by August 2017.

Financials of CERL:

The authorized share capital of CERL is Rs. 400 crore and its subscribed and paid-up

share capital.

3) Mahanadi Coal Railway Limited (MCRL)

A joint venture company called ‘Mahanadi l is Rs. 306 crores (Ircon’s share being Rs.

139.06 crore) as on 31stMarch 2017. CERL is yet to start commercial operations.

Coal Railway Limited’ (MCRL) was incorporated on 31stAugust 2015, with equity

participation by Mahanadi Coalfields Limited, Ircon, and Odisha Industrial Infrastructure

Development Corporation (nominee of Govt. of Odisha) in the ratio of 64:26:10

respectively, with the main object to build, construct, operate, and maintain identified rail

corridor projects that are critical for evacuation of coal from mines in the State of Odisha.

MCRL has signed project execution agreement with Ircon on 19thApril 2016. Angul-

Balram-Jharpada new rail corridor has been identified by the Company for

implementation. Feasibility Report has been submitted to East Coast Railway (ECoR) on

76
 8th August 2016 and DPR has been submitted to ECoR on 18th July 2017 and forwarded

to Railway Board on 20th July 2017 for approval. Land acquisition process is in progress.

Financials of MCRL:

The authorized, subscribed, and paid-up share capital of MCRL is Rs. 5 lakhs as on 31st

March 2017.

4) Jharkhand Central Railway Limited (JCRL)

A joint venture company called ‘Jharkhand Central Railway Limited’ (JCRL) was

incorporated on 31st August 2015, with equity participation by Central Coalfields

Limited, Ircon, and Govt. of Jharkhand in the ratio of 64:26:10 respectively, with the

main object to build, construct, operate, and maintain identified rail corridor projects that

are critical for evacuation of coal from mines, in the State of Jharkhand.

JCRL had signed project execution agreement with Ircon on 28th March 2016. Railway

Board on 6th April 2016 has granted in-principle approval for project transferring Broad

Gauge Single Railway Line connecting Shivpur to Kathautia from km 41.5 to km 90.7 in

the State of Jharkhand, having a total route length of 49.2 km and track length of 68.7 km

to JCRL. The construction of the project is expected to be started by March 2018 at an

estimated cost of Rs. 1400 crore. Orders for acquisition of private and Government land

acquisition have been issued and environmental clearances are under process. Feasibility

/ initial viability estimation and Detailed Project Report (DPR) are in the process of

finalization.

77
 Financials of JCRL:

The authorized share capital of JCRL is Rs. 100 crore and its subscribed and paid-up

share capital is Rs. 50 crore as on 31st March 2017.

5) Chhattisgarh East-West Railway Limited (CEWRL)

A joint venture company called ‘Chhattisgarh East West Railway Limited’ (CEWRL)

was incorporated on th 25 March 2013, with equity participation by South Eastern

Coalfields Limited, Ircon, and Chhattisgarh State Industrial Development Corporation

Limited (nominee of Government of Chhattisgarh) in the ratio of 64:26:10 respectively,

for development of coal connectivity corridor i.e. East-West Corridor (length 135 Km) in

the State of Chhattisgarh. CEWRL had obtained the Certificate for Commencement of th

Business on 7 May 2013. Detailed Project Report (DPR) was approved by Zonal

Railways viz. South Eastern Central Railway in July 2015. Land acquisition proceedings

are in process. Concession Agreement is yet to be signed between CEWRL and Ministry

of Railways. Approval of inflated mileage obtained from Ministry of Railways. Financial

st closure of the project is expected by 31 March 2018. Financials of CEWRL: The

authorized share capital of CEWRL is Rs. 1110 crore and its subscribed and paid-up

share capital is Rs. 504 crore (Ircon’s share being Rs. 131.30 crore) as st on 31 March

2017. CEWRL is yet to start commercial operations.

78
6) Bastar Railway Private Limited (BRPL)

During the year 2016-17, a joint venture company called ‘Bastar Railway Private

Limited’ (BRPL) was the incorporated on 5 May 2016, with equity participation by

NMDC Limited, Ircon, Steel Authority of India Limited and Chhattisgarh Mineral

Development Corporation (nominee of Government of Chhattisgarh) in the ratio of

43:26:21:10 respectively, with the main object to build, construct, operate and maintain

Rowghat to Jagdalpur (via Narayanpur, Kondagaon) new railway line, in the State of

Chhattisgarh. The authorized share capital of BRPL is Rs. 5 crore. Shareholders

Agreement for BRPL has been signed th on 20 January 2016. As per the Articles of

Association of the Company, Ircon is the implementation agency for the project and

project th execution agreement was signed on 19 July 2017. Detailed Project Report

(DPR) has been submitted to South East Central Railway in July 2017 for approval.

Financials of BRPL: The authorized share capital of BRPL is Rs. 5 crore and its

subscribed and paid-up share capital is Rs. 4.55 st crore (Ircon’s share being Rs. 1.18

crore) as on 31 March 2017.

79
 CHAPTER-3

BACKGROUND OF THE STUDY

80
 BACKGROUND OF THE STUDY

 Dr. R. Vasanthagopal (2011) studied and stated that adopting GST against current

complicated indirect tax system in India will be a great step in blooming Indian economy.

 Panda and Ratel (2015) analyzed the impact of GST (goods and services tax) on Indian

tax scenario. They have detailed brief description of the historical Indian taxation system

and its tax structure. Then the need arose for the change in the tax structure from earlier

to GST model. GST has been discussed in detail in this paper by the author as the

background, silent features and the impact of GST in the present tax scenario in India.

 Dani S (2016) a research paper on an Impact of Goods and Services Tax (GST) on Indian

economy stated that GST would impact negatively on the real estate market. It would add

up to 8% to the cost of new homes and reduce demand by about 12%.

 Shrikant Paranjapee (2017), president of CREDAI Pune Metro, maintains that “The

impact of the GST on property prices will be difficult to gauge at this stage because of

the lack of clarity on abatement for land value. In a product, where the major raw

material is not covered by the GST, the tax input benefit will be hard to calculate or

justify. Only the market forces, the ready reckoned rates and time, will decide whether

and how much benefit will be passed on by the developers to the purchasers.”

81
 CHAPTER-4

RESEARCH METHODOLOGY

82
OBJECTIVE OF THE STUDY

The general objective of the study is to get practical insights of Goods and Services Tax.

The specific objectives are as follows:

a. To study about the GST {Goods and Service Tax} concept.

b. To study about the GST Registration process.

c. To study the impact on Real Estate agents and business companies.

83
Data collection

For the preparation of this report secondary source of data is used. The data are collected from

secondary source.

 Websites

 Newspaper

 Company annual reports

 Government annual report

While preparing this report I took help from company staff and group discussion with friends.

I have consulted related departmental staff.

84
 CHAPTER- 5

DATA INTERPRETATION AND

ANALYSIS

85
Comparative statement of balance sheet for the financial year 2016-17 & 2017-2018
Sr. Particulars 2017 2018 Increase/Decr Percentage
No ease change
Assets
1 Non-current assets
a.) Property 137.0 133.58 (3.50)
8 2.55
b.) Capital work-in - 0.98 0.98
progress 0.98
c.) Investment property 307.3 358.67 51.33
4 16.70
d.) Other tangible 1.21 0.83 (0.38) 31.40
Assets
e.) Financial assets
i Investment 973.1 984.52 11.37
5 1.17
ii Loans 339.8 806.34 466.50
4 137.27
iii Other 100.3 2729.4 2,629.08
3 1 2,620.43
g.) Defered tax assets 161.0 150.88 (10.17)
5 6.31
h.) Other non-current 403.6 141.07 (262.53)
assets 65.05

Total non-current 2423. 5306.2 2,882.68

assets 6 8 118.94
2 Current Assets
a.) Inventories 139.3 140.74 1.40
4 1.00
b.) Financial assets
i Investments 249.9 216.17 (33.74)
1 13.50
ii Trade receivables 424.6 673.75 249.09
6 58.66
iii Cash & Cash 1394. 1525.6 130.98
equivalents 7 8 9.39
iv Other Bank Balances 3262. 3074.7 (188.06)
83 7 5.76

86
v Loans 84.77 1.87 (82.90)
97.79
vi Others 659.6 624.73 (34.95)
8 5.30
c.) Current Tax Assets 1.72 29.09 27.37
1,591.28
d.) Other Current 526.3 1114.8 588.49
Assets 7 6 111.80

Total Current Assets 6743. 7401.6 (657.68)

98 6 9.75

Total Asset 9167. 12707. 3,540.36

58 94 38.62

3 Equity & liability

i Equity
a) Equity share capital 98.98 94.05 (4.93)
4.98
b) Other Equity 3728. 3657.9 (70.96)
86 1.90

Total Equity 3827. 3751.9 75.89

84 5 1.98

4 Liabilities
i Non-current
Liabilities
a) Financial liability
i) Borrowings 3203.0 3,203.08
- 8 3,20308
ii) Trade payables 0.45 0.46 0.01
2.22
ii) Other Financial 210.1 321.47 111.36
Liabilities 1 53.00
b) Provisions 76.18 75.28 (0.90)
1.18
c) Other Current 1711. 883.45 (828.31)
Liabilities 76 48.39

87
 Total non-current 1998. 4483.7 2,485.24
liabilities 5 4 124.36

ii Current Liabilities
a) Financial Liabilities
i) Trade Payables 363.7 512.86 149.11
5 40.99
ii) Other financial 687.2 942.66 255.38
liabilities 8 37.16
b) Other current 1968. 2737.2 768.79
liabilities 49 8 39.05
c) Provisions 297.9 265.32 (32.61)
3 10.95
d) Current tax liability 23.83 14.13 (9.70)
40.70

Total current 3341. 4472.2 1,130.97

liability 28 5 33.85

Total Equity and 9167. 12707. 3,540.32

Liability 62 94 38.62

Procedure of Comparative Balance Sheet

1. The Comparative balance sheet has two columns for the data of original balance sheet.

2. Third column is used to show increases in figures.

3. The Fourth column may be added for giving percentages of increase or decrease.

88
 INTERPITATION

The comparative balance sheet of the company reveals that during 2018 the

1) non- current assets of the company like property has been decrease of 3.5 crore i.e.

2.55%, capital work-in progress has been increase of .98 crore i.e. 98%, investment

property has been also increase of 51.33 crore i.e. 16.70% , all the financial assets have

also been increase, deferred tax asset has been decrease of 10.17 crore i.e. 6.31% and

the other non –current asset have also been decrease of 262.57 crore i.e. 65.05%. So as a

result total non-current assets has been increase during the year 2018 as compare to the

year 2017 of 2882.64 crore i.e. 118.93%.

2) It also reveals that during the 2018 inventories of the company has been increase of

1.4crore i.e. 1.004%, financial asset as investment has been decrease of 33.74crore i.e.

13.5%, trade receivables has been increase of 249.09 crore i.e. 58.65%, Cash & cash

equivalent has been increase of 130.9 cr i.e. 9.39%, other bank balance has been

decrease 188.06cr i.e. 5.76%, loans have been decrease of 82.94cr i.e. 97.84% and

others financial asset have been decrease of 34.95cr i.e. 5.29%, the current asset of the

company have also been increase of 27.37cr i.e. 1591.27%,and the other current asset

has been increase of 588.49cr i.e. 111.80%. So as a result total current assets have been

increase of 657.68cr i.e. 9.75%.

89
So the comparative balance sheet of IRCON of financial year 207-18 reveals that the total

assets of the company have been increase of 3540.32cr i.e. 38.61% during the year 2018 as

compare to the year 2017.

3) On the other side total equity of the company during the year 2018 have decreased of

75.86cr i.e. 1.98%. This table also reveals that during this year in liability the non-

current liability like borrowings has been increase of 3203.08cr i.e. 320308%, trade

payables has also been increase of .01cr i.e. 2.22%, other financial liabilities have

increased of 111.36cr i.e. 53%, but the provisions have decreased of 0.9cr i.e. 1.18%,

and the other non-current liability have also been decreased of 82.31cr i.e. 48.38%. So

as a result the total non-current liability has been increased of 2485.24cr i.e. 124.35%

during year 2018.

4) On the other hand the current liability of the company during the year 2018 includes

financial liability like trade payables has been increased of 149.11cr i.e. 40.99%, other

financial liability has also been increased of 25.38cr i.e.37.15%. Other current liability

has been increased of 768.79cr i.e. 39.05%. The provisions have decreased of 32.61cr

i.e. 10.94%. The current tax liability has been decreased of 9.7cr i.e. 40.70. So the total

current liability has been increased of 1130.97cr i.e. 33.84% .

90
So the comparative balance sheet of IRCON of financial year 207-18 reveals that the total

Equity & Liability of the company have been increase of 3540.32cr i.e. 38.61% during the

year 2018 as compare to the year 2017.

The overall financial position of the company is satisfactory.

91
 CHAPTER-6

FINDINGS, CONCLUSION,

SEGGESTIONS AND

LIMITATIONS

92
 FINDINGS

During the research I found that after the implementation of Goods and Services Tax in India:

 In construction industry, the buyers will benefit from reduction of prices.

 GST will bring a lot of transparency in the real estate sector.

 The overall financial position of the company is satisfactory because company’s assets,

equity and liability has been increase of 1:1 ratio during the financial year 2018 as

compare to the 2017.

 IRCON’s financial position is satisfactory due to which company starts investing in

security market from 29/sep/2018.

 IRCON is not only getting their projects in India but also outside the India, which is a

good indicator for the company. As a result company will become NAVRATNA in

upcoming years.

93
 CONCLUSION

The Goods and Services Tax (GST), a revolutionary tax reform rolled out on the 1st

of July 2017, has effectively replaced the previous Gordian Knot of multiple taxes

like VAT, central excise duty, commercial tax, service tax, Octroi, etc. It has made

India a 'tax-neutral' nation - and while it evoked a response best described as 'mixed'

from real estate buyers, most of these are in favor of it.

This is natural, as the unitary tax compliance system has simplified the home buying

process - and with the passage of Input Tax Credit (ITC), there may not be a

significant additional burden to buying a home. Homebuyers in the affordable

housing segment - specifically homes of up to 60 sq m carpet area in size - have

benefited significantly from the reduction of GST by 4% (from 12% to 8%).

However, even almost a year after GST implementation, the only real clarity that

exists for property buyers is on the prevailing GST rate of 12% on under-construction

projects. There is still confusion about the amount of rebate that a prospective

homebuyer is entitled to on the back of the pass-over of ITC. The confusion is not

only about the percentage of ITC but also on the mode and tranche of the rebate.

The company’s financial position has also been increase or become better during the

year 2018 after the implementation of goods and services tax.

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 SUGGESTIONS & RECOMMENDATIONS

After analyzing the data, I would like to give some suggestions that are:

 The government has to remove complexity in the tax slab.

 In real estate sector, there is confusion about the integration of input tax credit. So it

must have to be removed.

 According to company’s balance sheet of financial year 2017-18, the borrowings have

been increase so they have to decrease their borrowings in upcoming years.

 Company’s total equity has been decrease during the year 2018 so they will have to

increase their equity as a result company’s capital will be raised.

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 LIMITATIONS OF THE STUDY

Just like any other study, present study is also not exempt from limitations, foremost data is

collected from IRCON International Ltd. on branch and the findings may represent the all

branches of the IRCON GROUP. Further this study concentrates the all branches it may

have their own dynamics and may different results for different branches.

This study is based on the whole result of IRCON International ltd.

 Time and financial constraints.

 Analysis is based on secondary data which can be incomplete.

 There can be even being the printing mistakes by which the fake result could be generated.

 There are few data which kept confidential and they are basically available to the higher

executives.

 Authenticity of the data cannot be proved as it was received through informal meetings and

interviews.

 Proper analysis cannot be done with availability of limited information.

 Appointments with the higher executive were one of the major problems.

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 CHAPTER-7

BIBLIOGRAPHY

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 BIBLIOGRAPHY

 https://www.avalara.com/in/en/blog/2017/09/impact-gst-indian-real-

estate-sector.html

 https://blog.mygov.in/editorial/why-gst/

 https://www.gst.gov.in
 https://www.gstn.org
 https://www.gstcouncil.gov.in
 https://www.cbec.gov.in
 https://www.financialexpress.com
 https://www.wikipedia.com
 https://www.cleartax.com
 https://www.ircon.org

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CHAPTER-8

ANNEXURE

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ANNEXURE:-

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